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Sunday, March 29, 2015

Taxes and the middle class

This year Matt and I just barely squeezed into the middle class. I guess we have always been middle class since that's what we were raised in, but this time our taxes actually reflected that.

It's been interesting to think about how drastically this has changed our family dynamic from when we were floating around the poverty line.

This year we paid a little over $3,000 in taxes, over half of which was self-employment tax. Since we had no liability last year and hadn't made estimated payments, most of it was debited from our bank account in a single day, which we sort of shrugged off. The money would have been nice, another vacation perhaps, but it would have been spent on extras or stashed away in savings. So it left with no fight or discussion. Matt let me know and I acknowledged it, but that was that.

Compare that to just 2 years ago...

The first full year that we were married we made $10,600 total. Madeleine was born in December, and the following year we made about as much. We had everything we needed but every tiny expense was watched.

One memory that stands out in particular was Madeleine's first Easter. I remember walking up and down the aisle at K-mart trying to find things that she could enjoy that I could put in her Easter basket. I spent forever mulling over an item and putting it in the cart, only to put it back just a little while later when I realized that it was more than I could afford. I was thrilled when I found her a fancy Christmas dress that was marked down to $7. It was silver and I was sure it would make the perfect Easter dress. I left with less than $20 worth of things. When I got home, Matt was extremely anxious and distressed over the purchase. He understood that I wanted to do something special but it wasn't in the budget and he was worried that we would end up on the street or something. I cried myself to sleep that night.

This year has been drastically different. Just tonight I was looking at lamb chops for Easter dinner -$15.99/lb. I stood there calculating how much we would need to feed us and the two other people that we are having over. It's still more than I liked to spend, but I also know we can afford it. Buying this meat would not change our monthly budget and would just be a blip in our weekly budget. Matt patiently stood there holding Madeleine waiting for me make up my mind. He wasn't even stressing over it.

When I think about it, it's amazing to me how just in 2 years our lives have changed. This year we got ourselves out of debt. We even have a tiny bit of savings. We don't fight over money anymore. We even planned and paid for our own vacation!

We're not fabulously wealthy--Matt and I both work at just over minimum wage. Money is still tight, but we aren't starving for it either. It isn't the thing that is constantly on our minds. We aren't anxious for the next paycheck. If something breaks now, it's not the end of the world.

When I think about people who are stuck at the poverty line, I feel sad. I realize that a lot of the reason that we can move up to middle class comes from our privileged upbringing. Matt and I grew up in fairly functional families. We both attended some of the best high schools in the country. We went to a good college, and Matt's getting a PhD. We are white (on at least one occasion, someone admitted that race influenced their decision to hire me.) We have the education to know how to cook and budget. We have the connections to barter and to get free stuff from our wealthier neighbors. We live in a wealthy community, and although our rent is a little higher, the community resources are incredible

I frequently think about people who are stuck at the lower income level we had when we were first married. I remember the stress. I remember the fear that wasting a single dollar, that buying a hamburger could put us under. I think about the hard choices we had to make--how we had to put up with atrocious health care options.

So when we paid our taxes, Matt and I took a very socialist view of it, because we learned that $20 can put more stress on a relationship than $3,000.

2 comments:

I especially appreciate the paragraph where you document your privileges--while Jesse and I are still hanging out below the poverty line (it turns out that going into major debt for law school and having no income will do that for you!) in a few years, our situation will be different (we won't be rolling in it--Jesse's not studying that kind of law!) and for the most part it'll be because of our own privilege. It's nice to know that one day in the future, I won't freak out about the budget when I want to stop and buy a cheeseburger for lunch on the way home from storytime--but also a little sad, when I remember that there are lots of people who don't look forward to moving out of poverty anytime soon. Thanks for the thoughtful post!

It's crazy how stressful buying lunch out can be. I'm a bit nervous because I'm not counting on having this job forever. We'll drop back down to poverty line and I'm not looking forward to the stress again.